The Complete Guide on Pre-employment Credit Checks

Before you take an interview, you update your resume, cover letter, do thorough research on the company and prepare typical questions beforehand that you anticipate you could be asked to demonstrate that you are a best suitable candidate for the position you have applied for, but an employment credit check slips through the cracks.

Not all jobs require credit checks, however, if you belong to a financial and accounting department, you cannot escape it. Since you are supposed to handle money and personal financial information of people, the employer must ensure that you are a reliable person.

Why is a pre-employment credit check imperative?

Employers seek access to your credit report so as to know about financial distress. Of course, they will not look forward to hiring a person who is living under the pressure of Loans. Such people are more likely to make fraud and embezzlement. Note that they get a modified version of your credit report that does not show your credit score and any account number. Your company may ask for your credit report from any of the credit reference agencies- Experian, Equifax and TransUnion – but it does not make any hard inquiry, so your scores will not be pulled, nor your employer will see if other employers have checked your report earlier.

Here is what an employer looks at your credit report:

• Late payments – They can indicate that you do not stay on the same page. More often than not you have excuses to miss repayments. Chances are you rely on debt for your day-to-day operations.

• The number of credits – A report showing high debts may call your reliability into question. The employer may doubt that there is a higher possibility that you could fiddle with finances.

Evidence of mishandling your own finances may infer that you are a poor candidate to fit for the role that involves responsible handling with company’s money and confidential information.

Your rights when it comes to employer credit checks

Employers can run credit checks as a part of the selection procedure but they must look for your permission to do so. You will not be taken aback by a credit check that your employer will run as they will keep you in the loop in advance. However, keep in mind that you are not likely to be hired if you withhold your consent. If your employer peruses your credit report and finds a reason for not hiring you, you have the right to get the copy of the report and to know which information served them a basis for turning you down.

How to prepare for a credit check

The first step is to get a copy of your credit report to peruse if it consists of any default that you do not identify. You are likely to find several errors like a pending default that you have already settled or that goes unidentified. Contact the agency immediately and dispute the error. Make sure that your credit report shows correct, up-to-date information. In addition, you will have to follow these ways too:

• Limit your credit applications

Overly reliance on loans can allow of an interpretation that you can embezzle with organisations’ finances down the road. Make sure that you do not apply for multiple loan offers and credit card deals within a very short period. The lower the number of credits, the higher the chances of hiring will be.

• Pay all bills on time

The modified version of your credit report will throw light on your payment history. Try to pay all your debt instalments, credit card bills and utility expenses on time. Making all repayments timely tells about your financial commitment, which is the most important aspect that an employer must look for before hiring you.

• Use the credit limit wisely

Credit usage has also a big impact on your hiring. The credit report will also give details about the credit cards. If you max out them, this will give a message that you are overextended. According to financial experts, you should not have consumed more than 30% of the limit of your credit card.

If you are applying for a job in the finance and accounting industry, you cannot escape pre-employment credit checks. Since you know your goals and your credit situation, start making efforts to improve your credit instead of spending sleepless nights. A credit score builds when you pay off your loans on time. You should make a plan before borrowing money so that you do not owe more than your affordability. If you are juggling with multiple debts, you should talk to your lender to know about other repayment alternatives or find other ways to make money. You cannot fix your credit score overnight, but it is not as hard as you think.